Driving Up Employee Engagement With Benefits Administration Software

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By Dave Foxall

How to Get Employees to “Feel” the Benefits of Benefits Administration Tech

Analysts and HR commentators have long seen a strong link between employee engagement and improved business performance. Back in 2006, The Society for HR Management (SHRM) stated, “Engaged employees provide a competitive business advantage. Research shows a significant link between employee engagement, customer loyalty and profitability.” And this view is still current today, a Hay Group Study found that engaged employees were as much as 43% more productive than those employees who were effectively disengaged. So, with employee engagement levels so critical to success, it is perhaps no surprise that the trend is for all aspects of HR and leadership to incorporate the ‘engagement factor’ and benefits administration is no different.

Benefits administration technologies offer increasing real-time control for employees over their own benefits choices and management, resulting – predictably – in a greater degree of involvement, empowerment and ultimately, engagement. As a SHRM case study points out, “The more employees knew about their company’s rewards system, the more satisfied they were with it. And with greater satisfaction came greater commitment and engagement at work.” The following key features of benefits administration software are particularly instrumental in driving up employee engagement.

Easily one of the most utilized and essential benefits administration software features, most ‘e-benefits’ solutions are underpinned by employee self-service (ESS) functionality—providing each individual employee with access via a form of HR portal to personal details including health benefits, pension contributions and planning calculators, EAP program offerings, and educational benefits. As the SHRM says in its paper, Transforming HR Through Technology, “It is now a best practice to push the management of benefits to employees. By using employee self-service (ESS), organizations encourage employees to sign up for benefits online and manage their profiles and benefits online.” Adoption has definitely hit majority levels with ESS use at 72% and typically about 10% higher in large organizations with greater than 10,000 employees (source: CedarCrestone’s HR Systems Survey) and just under a third of organizations worldwide offering handheld mobile access to benefits ESS (source: Bloomberg Businessweek, Mobile HR: The Global Challenge).

The advantages of ESS include a more rapid than usual user adoption rate due to the prevalence (and therefore familiarity) of the self-service concept in employees’ personal lives by way of online banking and shopping. Additionally, ESS can provide a direct link to automated open enrollment, giving employees the option of engaging in benefits open enrollment without the need to log a call or e-mail with HR. Factor in the capability of reviewing and managing plans such as 401(k) and ESS offers not only significant process time reductions but also and expanded degree of employee empowerment.

Benefits are a core element in “total compensation” or “total reward” management strategies and benefits administration software can offer an employee the option of instant, any time access to their total reward statement (TRS). Towers Watson suggest that, “Employees often underestimate the value of their benefits package by as much as 70%. A total reward statement will provide your employees with a holistic view of their reward package either in hard copy or in 'real-time', online,” This function can lead to better employee understanding of the real impact of their benefits choices and - at a time of reduced, if any, salary increases - a clear picture of the non-salary and intangible value elements in their reward package. Towers Watson go on to cite the use of TRS as offering improved morale and lower staff turnover when used as part of a wider employee engagement programme and this is endorsed by Jelf Group research which shows that a total reward strategy can lead to a 10-25% increase in appreciation of employee benefits in employee engagement surveys.

Rewards and Benefits options are often developed with recruitment and talent retention in mind, however, less thought tends to be given to how they can secure engagement. As Taleo point out, “While reward and incentives should be introduced with the needs of the business in mind, they are useless as an engagement tool if staff feel disconnected from what’s on offer.” A software-driven flexible benefits strategy allows employees to adjust their pay and benefits packages to suit their requirements, choosing from a menu of benefits options or cash alternatives; the end result of which is that rather than receiving a set benefit package each year, staff can adjust their plan to suit changes in their personal circumstances and so have more control over the benefits they receive.

Many benefits administration solutions offer financial education tools to assist employees in their benefits choices. Usually seen as peripheral to the core benefits functions, a Vebnet report (Thought Leadership Financial Education) suggests that such functionality could be moving to centre stage in its capacity for securing employee engagement: “By positioning the reward portal as the place to go for all personal finance matters – a holistic employee reward portal – employers can strengthen the link for employees between benefits and personal goals. In other words, they can demonstrate more clearly than ever how individual benefits could fit into the broader context of employees’ lives and different stages of their financial lifecycle” As personal financial security becomes less of a certainty than ever and more and more employees struggle to plan or keep control of their finances, the organization can help by providing much-needed education in money management; including how to get the best from employee benefits.

Final words on Employee Engagement and Benefits Administration Software

There is no doubt that deploying benefits administration software generally increases employees’ awareness and understanding of their overall benefits package. However, the return on investment does not end with this basic function as the increased levels of employee involvement and control over this aspect of their working lives in turn drives up commitment to the workplace and employer. As the Forrester report (HRM Solutions: Traditional Models Clash with Next-Generation Processes and Technology) states, “Compensation and benefits build loyalty and retention around rewards programs.” And as the expense associated with health care and pension plans continues to rise, so organizations need to leverage more fully the tangential outcomes of how they are approaching benefits administration.